Capital Account Safeguard Measures in ASEAN: A Risk-Based Assessment of Capital Flow Shocks, Policy Responses, and Lessons from 2015-2024
This paper assesses how ASEAN economies managed capital flow shocks before, during, and after the COVID-19 pandemic, drawing on 2015–2024 balance of payments data and survey responses from all ten ASEAN Member States (AMS). It finds that AMS generally did not resort to broad new capital flow restrictions. Instead, AMS employed different combinations of monetary, fiscal, liquidity, prudential, and operational measures, alongside foreign exchange measures, to address country-specific pressures and vulnerabilities. These experiences reflect diverse policy responses shaped by the nature of capital flow pressures and the underlying vulnerabilities of individual economies, rather than a uniform regional approach. These experiences also illustrate the considerations in selecting policy measures, assessing associated trade-offs, and determining appropriate exit conditions. Overall, the paper highlights the importance of policy preparedness and flexibility in managing capital flow shocks.
